How Much Did Dolat Investments'(NSE:DOLAT) Shareholders Earn From Share Price Movements Over The Last Year?

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in Dolat Investments Limited (NSE:DOLAT) have tasted that bitter downside in the last year, as the share price dropped 10%. That contrasts poorly with the market return of 6.7%. Because Dolat Investments hasn't been listed for many years, the market is still learning about how the business performs. But it's up 7.0% in the last week. The buoyant market could have helped drive the share price pop, since stocks are up 3.0% in the same period.

Check out our latest analysis for Dolat Investments

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the unfortunate twelve months during which the Dolat Investments share price fell, it actually saw its earnings per share (EPS) improve by 48%. Of course, the situation might betray previous over-optimism about growth.

It's fair to say that the share price does not seem to be reflecting the EPS growth. So it's well worth checking out some other metrics, too.

With a low yield of 0.3% we doubt that the dividend influences the share price much. Dolat Investments managed to grow revenue over the last year, which is usually a real positive. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Dolat Investments' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Given that the market gained 6.7% in the last year, Dolat Investments shareholders might be miffed that they lost 10% (even including dividends). However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 4.5%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). Is Dolat Investments cheap compared to other companies? These 3 valuation measures might help you decide.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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